Most innovative market data project—Tradeweb

Most innovative market data project
Inside Market Data & Inside Reference Data 2024-logo-BB8


Product overview—Ai-Price for Municipal Bonds 

In early April 2022, Tradeweb announced the launch of its Tradeweb Automated Intelligent Price (Ai-Price) service for municipal bonds, which uses proprietary machine learning and data science functionality, combined with Municipal Securities Rulemaking Board (MSRB) and Tradeweb’s own proprietary data to price approximately one million municipal bonds at or near traded prices. The Muni Ai-Price model is data-driven and therefore doesn’t rely on human interpretation to adjust pricing, while all of its inputs and outputs are reproduceable and explainable to support any price challenges.



Access to accurate and transparent pricing has always been a challenge for municipal bond market participants. Of roughly 880,000 tax-free municipal bonds, only 2.27% are traded on a daily basis, according to MSRB data from February 2024. Also, traditional pricing models don’t account for the size of holdings and therefore might not reflect true market value. Muni Ai-Price addresses this challenge by using machine learning and proprietary data to price bonds based on custom holding sizes, even if the bonds trade infrequently. 



Tradeweb undertakes monthly comparisons of its modeled prices versus actual next-day trade prices. It analyzes any next-day trade differences across size, duration and liquidity, and identifies variations across these three variables, which are accurate compared with where next-day trades actually occur. The firm has received customer feedback that its Muni Ai-Price prices are more accurate than other evaluated pricing services when it comes to predicting next-day trade prices. 


Recent milestones

  • Tradeweb currently prices 98% of the US municipal bond market; it plans to expand the coverage of its Ai-Price models to 100% coverage of that market.
  • Tradeweb launched an email tool allowing clients to email specific Committee on Uniform Security Identification Procedures – or Cusip – identifiers to the firm and receive instantaneous responses with current pricing.
  • Tradeweb currently supports intraday pricing via an application programming interface (API); it is working to expand the API to also include historical point-in-time data. 


Tradeweb Ai-Price for municipal bonds represents the next frontier in applying data science and machine learning to help make markets more efficient. We collaborated with clients as we developed this tool to offer increased price transparency, accessibility and reliability to clients who trade and invest in the municipal bond market, and we continue to receive positive feedback on all of its benefits.
Lisa Schirf, managing director, global head of Data & Analytics, Tradeweb


Why Tradeweb won

Tradeweb has emerged top in what is a traditionally hard-fought category in the annual Inside Market Data & Inside Reference Data Awards, thanks to its outstanding municipal bond pricing initiative, a move that represents a genuine step forward in the perennially challenging task of accurately and transparently pricing municipal bonds. Extrapolating accurate municipal bond prices is only half the challenge of this market—the other half centers on transparency around how those prices were calculated, allowing them to be explainable and “defendable” in the event of client price challenges. Given the number of large buy-side managers active in the US municipal bond market and end-investors’ expectations/requirements that their managers partner with reputable third-party pricing services, it is safe to assume that Tradeweb’s Ai-Price service will continue to build on its initial success.

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